December 11, 2007

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ApotheCure, Inc. shipped mislabeled dangerous prescription drugs into Oregon and three patients died as a result of poisoning

Attorney General Hardy Myers today filed a lawsuit against a Dallas, Texas, compounding pharmacy and its owner alleging that the company illegally sold mislabeled dangerous prescription drugs in Oregon resulting in the poisoning deaths of three clients--two in Oregon and one in Washington. The company was not registered with the Oregon Board of Pharmacy as required by law. Named in a complaint filed today in Marion County Circuit Court are ApotheCure, Inc. and its owner, Gary Osborn, of Dallas, Texas.

Oregon's lawsuit alleges that the unlicensed company unlawfully sold dangerous prescription drugs in Oregon including Colchicine, a highly toxic drug that must be used with great care to avoid injury and death. The defendants allegedly sold Colchicine to treat back pain, a use of the drug that has not been approved by the U.S. Food and Drug Administration (FDA) and for which Colchicine is largely ineffective. In February 2007, the defendants allegedly shipped 31 vials of mislabeled Colchicine into Oregon that was eight times more concentrated than indicated on each vial's label. At least three people died as a result of poisoning by the mislabeled product. The complaint alleges that the defendants also sold Colchicine that was less potent than indicated on the label.

Myers alleges that the Colchicine mislabeling was not an isolated incident but the reflection of a "pattern and practice of substandard care" and consistent with the company's "use of operating procedures that failed to comply with basic good pharmacy standards and practices." Oregon is alleging violations of its Unlawful Trade Practices Act (UTPA) and the state licensure laws.

Texas Attorney General Greg Abbott simultaneously sued the defendants and Spectra Pharm, Inc., a retail store in Dallas owned by Gary Osborn, for substandard practices and unlawfully manufacturing customized drugs not approved by the U.S. Food and Drug Administration (FDA). Texas officials are alleging violations of both its consumer protection and food, drug and cosmetic acts.

"Oregon consumers must be able to assume that drugs as prescribed are safe and effective," Myers said. "We will not tolerate companies that operate in Oregon with reckless disregard of our law."

In addition, the defendants used their status as a Texas pharmacy to operate as an unlicensed drug manufacturer to formulate, fabricate, and promote new drugs without performing the clinical trials necessary to establish that these new drugs are safe and effective for the use for which they are promoted. Among the unapproved drugs manufactured and promoted by the defendants is Adrenal Cortex, a drug that was removed from the marketplace by the FDA for safety reasons.

"It is important for the public to understand that compounding pharmacies operate in a grey area between the practice of pharmacy and business of drug manufacturing," Myers explained. "Manufacturers of drugs are regulated by the FDA while pharmacies are regulated by the State Board of Pharmacy and operate with considerably less regulatory oversight."

Today, ApotheCure, Inc. received from the Oregon Board of Pharmacy (Board) notice of a proposed civil penalty of $500,000 for engaging in distribution of drugs into Oregon without registering with the Board. The defendants have a 21-day period to request a hearing or the Board may issue a final order of default. The Board reviewed the case on December 4, 2007, and voted unanimously to issue a civil penalty not to exceed $1,000 per violation pursuant to its authority under the Oregon Pharmacy Practice Act.

The Oregon Department of Justice (DOJ) asked the court for a judgment against the defendants that permanently restrains them from misleading consumers during the offer or sale of their products and that permanently enjoins the defendants from labeling, advertising or promoting products without possessing competent and reliable scientific evidence that substantiates the representation.

DOJ is also asking for restitution to all consumers who purchased products from the company and disgorgement of the value of all unlawful sales of drugs. A further requirement sought by DOJ is to require the defendants to sell compound drugs in Oregon only after receiving a valid prescription but not allow them to sell or promote compounded drugs that are already commercially available in the marketplace. DOJ seeks civil penalties of up to $25,000 per each violation of the UTPA and reasonable attorney fees.

Consumers wanting more information about the ApotheCure case or consumer protection in general may call the Attorney General's consumer hotline at (503) 378-4320 (Salem area only), (503) 229-5725 (Portland area only) or toll-free at 1-877-877-9392. DOJ is online at www.doj.state.or.us.